Canberra teens get into the property game

At just 18 years of age Ryan Thurgar and Rhianna Parker have already put down a deposit on an off-the-plan two-bedroom apartment.

Ryan Thurgar and Rhianna Parker already have the deposit for their two-bedroom apartment. Picture: Alan Lee

The Canberra teens are working towards buying the home located in the Jardin Terrace Southquay development, located in the heart of the Tuggeranong Valley.

So how did they do it and when will they formally own this two-bedroom unit?

How did this couple save for a deposit?

Ryan and Rhianna aren’t your typical teenagers. Eager for their independence, they decided that instead of spending their money on a holiday, car or even shares – they could try and buy or save up for a home.

This young couple’s hunt for a property began earlier this year when they were still just 17 and initially they had no intention of actually making a purchase so quickly.

This all changed when they found Jardin.

Ryan and Rhianna fell in love with the apartment plan, and were already saving money weekly in an effort to be able to save for the deposit.

Being new home buyers in the ACT, the couple has access to $7000 through the ACT’s First Home Owner Grant and were also offered a $10,000 rebate incentive from the developer.

Here are their tips for other younger Australians looking to get into the property market.

1. Eyes on the prize

Both Ryan and Rhianna are still in their final year at school and are currently working casual jobs.

Together they have saved up $17,000 for a deposit which is just over the 5% required by their developer.

For now, their funds are held in trust by the selling agent, and will be released upon completion of the apartment.

The developer is also offering a $10,000 rebate which buyers can access after the building is completed which is due to be in 2019.

The rebate is subtracted from the total selling price of their apartment.

“Once we sat down, did the math and realised we could actually do this, we just went for it. The apartment also had a $10,000 rebate, which definitely sealed the deal,” Rhianna says.

There will be communal outdoor areas in the Jardin Terrace Southquay development.Picture: realestate.com.au/buy

Mortgage broker Tony Henry from TNT Finance, notes that it’s always best to speak with a solicitor or conveyancer before signing a contract for sale.

“The risk with any off-the-plan purchase is the inability to secure unconditional loan approval so far in advance. An unconditional loan approval is usually only for 90 days, which can vary slightly from bank to bank,” Tony says.

To obtain an unconditional approval a valuation is required on a completed property.

“Often, an off-the-plan purchase can have a two-year construction period. It is possible that the valuation in two years’ time could be less than the purchase price. This will have an effect on the loan value ratio (LVR),” Tony says.

Currently, Ryan and Rhianna have placed a 5% deposit in trust, which in the unfortunate circumstance that the development does not proceed, will be returned to them in full.

2. Set out as you intend to finish

“We started off with Ryan’s Commonwealth Dollarmite account,” Rhianna says.

Ryan’s mother had put a small amount of money into his account each fortnight since he was five – which totalled just under half of the deposit.

The couple then began working nonstop, while still maintaining their school commitments.

“We worked in all our free periods and all day on weekends. We had a system in place, ‘save the hundreds, spend the tens’,” Rhianna says.

“This worked well so that we could still live a little, while saving the majority.”

Henry says that maintaining income and savings is key, especially when applying for a loan.

“It is important not to spend your deposit, and to have saved it by the time you need your loan approved. Banks are not interested in how much you will have in two months, but rather how much you have at the time of loan approval,” says Henry.

3. Seek advice

With most of their friends living at home still, buying a home wasn’t really a hot topic of conversation among people their own age.

The couple had to learn a lot about purchasing a home, and quickly. But luckily both sets of parents were able to help out.

“It wasn’t really an easy decision. We were only 17 and still at school – we had to learn a lot about the legalities of purchasing a home and how it could be a risk with proceeding ahead given our age and current financial position,” says Rhianna.

This young couple has already put down a deposit for an apartment in the Jardin development. Picture: Alan Lee

Turning 18 and getting a crash-course in buying a home from mum and dad, has helped the couple move forward confidently with their purchase.

Ryan and Rhianna’s home will be completed in 2019 and the couple is already busy working towards their next goal, saving for the 20% deposit that will help them avoid lender’s mortgage insurance.

“Jardin only requires a 5% deposit now, and another 5% deposit upon completion. We wish to save 20% so we do not have to pay mortgage insurance. We purchased this apartment without getting a loan as it’s way too early to even apply and we are still in school and working part-time,” says Rhianna.

Upon completion of the apartment and final approvals and registrations of the plan, the couple will be notified of the settlement date. From there, they will then hand over the balance of the payment – partly made up of their own funds and a loan from their financial institution – and settle the property.

And how will Ryan and Rhianna save for the full deposit of their home loan?

“We are going into full-time work as soon as year 12 is over. We would like to eventually study, but we’re more keen on setting ourselves up financially before committing to schooling,” says Ryan.

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